Cokal updates C. Kalimantan coal project
Friday, April 29 2016 - 08:35 AM WIB
EXPLORATION
BBM Project
BBM?s Production IUP covers an area of 14,980 hectares (ha), immediately adjacent to BHP Billiton?s Juloi tenement, straddling the Barito River and has multiple seams of high quality metallurgical coal.
GEOLOGICAL ACTIVITY
As there has been no further drilling or outcrop mapping since the previous Coal Resource report of January 2015, the tonnage estimation and categorisation of the Coal Resources remain unchanged. However, differences in analytical results between earlier borehole samples and more recent outcrop channel samples have been under review. It was observed that with respect to Seams B, C and D, the outcrop samples consistently recorded very low Ash content, which was in difference to the higher Ash contents recorded in the nearby borehole samples. This is now considered to be most likely highly contaminated by the use of drill muds and non-coal material which collapsed in the borehole from above the seams. It is believed that this contamination resulted in the anomalously high ash results for the core samples. Consequently, the review is defining a better quality (lower ash content) of coal than previously defined.
A 2016 updated report of the BBM Underground Mining Project Central Kalimantan Indonesia Scoping Study in the BBM East Block is also substantially completed. This Scoping Study report outlines the concept and rationalization of a proposed underground mine plan for the East Block of BBM. The remainder Inferred Coal Resources in East BBM for Seams D and J are considered amenable to modern underground mining extraction methods. The coal seams are generally thicker than 1m and the roof predominantly consists of very hard sandstone (up to 95Megapascals (MPa)) while the immediate 1m to 2m of roof consists generally of a competent siltstone. This combination is ideal for extraction of the deeper Coal Resources using underground methods such as thin-seam long-wall mining. The Scoping Study has identified the potential for four (4) large underground mining blocks utilising the longwall method of extraction of both the ?D? and ?J? seams.
MINING ACTIVITY
No mining activities were carried out during this Quarter. A review of the Definitive Feasibility Study (DFS) was conducted with regard to current fuel and steel prices in order to maintain pertinence.
ENVIRONMENTAL ACTIVITY
In order to maintain minimum expenditure while waiting construction and mining to commence in BBM, revegetation of 90% of areas affected by exploration activity is now complete. Over 15,000 seedlings have been planted along access roads and on drill sites, comprising of some 5,000 trees and some 10,000 ground cover. Approximately 2,000 trees have been distributed to local schools during this period to coincide with Earth Day Tree Planting pprogrammes on 20 April 2016.
Storage of waste material on site is at a very low level and complies with the maximum statutory holding period on site at all times.
Preparations are well progressed for the transit and release of 12 orangutans by Borneo Orangutan Survival Foundation approximately 150 kilometres north west of the BBM minesite. This release of orangutans who are victims of forest fires and land clearing by agricultural companies is timed to coincide with Earth Day. Cokal provides logistic support, accommodation and messing for BOSF staff and holding enclosures at its BBM mine site for 12 orangutan. The actual releases are scheduled for 11 ? 25 April 2016. It should be noted that the orangutans were not found within the BBM tenement area, and that Cokal is conducting this work as part of their commitment to community service and support.
BBP Project
No exploration activity was conducted on BBP during this period.
AAM and AAK Projects
AAM Project
Cokal completed the sale of its 75% interest in of PT Anugerah Alam Manuhing (the? AMM?) for US$150,000 to PT. Jinantra Karya Raya, an Indonesian company which owns the tenements adjacent to AMM. Cokal considered AMM a non-core tenement located a considerable distance west of BBM and in different geological formation.
While it is believed PT AAM contains high Calorific Value (CV) thermal coal, there is less confidence of any discovery of metallurgical coal, the core focus for Cokal. It was therefore considered appropriate in the current climate to realize the value of AAM, reduce ongoing liabilities and to use the funds for working capital while the Board pursue the funding options previously announced for BBM.
Cokal is considered by many as having extensive experience, built up over past five years, in working within the Indonesian mining regulatory process. This is evident as Cokal?s Bumi Barito Mineral Coal Project (?BBM?) is the only mining project to be issued a new Production Forestry Borrow and Use Permit (IPPKH) approval since the new process was announced by the Indonesian Government on the 26th of January 2015. Consequently, PT. Jinantra Karya Raya has employed Cokal to provide non? exclusive consulting services on a retainer basis. The retainer is for US$400,000 and expires on 12 June 2016.
AAK Project
Cokal has a 75% share of Anugerah Alam Katingan (AAK) projects also located in Central, Kalimantan, Indonesia. The AAK project area comprises of 5,000ha
Applications for the Exploration Forestry Permit (IPPKH) and Clean and Clear Certificates continue to be processed.
Following official handover letter (dated 12 January 2016), AAK IUP is currently on ?on-hold? status by Provincial Police Department (Polda Kalteng). It is being decided by police following their investigations re ?AAK ownership dispute? issues. Cokal is an aggrieved party and will await the outcome of the Police investigation into a period predating Cokal?s interest in the Project.
SNR Project
Aapplications for the Exploration Forestry Permit (IPPKH) and Clean and Clear Certificate continue to be processed.
PROJECT DEVELOPMENT
MANNING
Further reduction in staff and employee numbers have been made to limit expenditure. All redundancy and reduction requirements have been conducted in accordance with Indonesian labour regulations and Cokal has been assisted in this process with substantial help from both local and provincial labour departments in order to ensure total compliance.
ENVIRONMENTAL REHABILITATION
Cokal continued last quarter to undertake environmental monitoring on site as part of ongoing baseline studies.
Rehabilitation activities have been substantially completed throughout the previously disturbed exploration areas. Areas of ground cover and trees that were peviously described as becoming ?distressed? due to the extended dry season are flourishing and highly viable due to a normal high rainfall wet season experienced fom late 2015 to the present
Effort is now being expended into increasing nursery stocks both for the school planting programme and mine infrastructure replanting in the future.
APPROVALS & EXTERNAL RELATIONS
BBM PRODUCTION APPROVAL ADVANCES ? UPDATE
Following the issue of the ?Ijin Pinjam Pakai Kawasan Hutan ? Operasi? or ?Borrow To Use Forestry Permit - Operation? which allows BBM to start construction and mining BBM has commenced activities associated with the compulsory rehabilitation of an area of damaged forest near the BBM minesite. These activities include community review and discussion with regard to rehabilitation and formulation of a rehabilitation budget and programme.This activity is a pre-requirement for the issue of the ?Borrow to Use Permit?
BBM WEST BLOCK EXPLORATION IPPKH EXTENSION
Since the issue of the Borrow to Use Permit ? Exploitation (IPPKH-OP) Cokal has proceeded with the application for a Borrow to Use Permit ? Exploration for the Western Block of BBM and this application is currently with Planology Dept. at the Ministry of Environment and Forestry
BBP PRODUCTION APPROVAL ADVANCES ? UPDATE
The IUP production / operation (Mining Lease) licence has been signed by the Murung Raya Bupati and forwarded to the Provincial Mines Department for issue. This is part of the process whereby IUP?s throughout Indonesia are being centralised to the Provincial Mines Departments. We are expecting the issue of the IUP Operation in Q2 2016
Cokal has submitted its application for the Clean and Clear Certificate Exploration from the Director General of the National Mines & Energy Department formalising the previous award of Clean and Clear status.
TBAR EXPLORATION FORESTRY PERMIT
Cokal continued during the last quarter to progress the Exploration Forestry Permit for TBAR with the Central Kalimantan Provincial Government. (end of excerpt)